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EXHIBIT 10.12
FOURTH AMENDMENT TO THE
REVOLVING LOAN AND
SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO THE REVOLVING LOAN AND SECURITY AGREEMENT (the
"Fourth Amendment") is entered into by and among NATIONAL CANADA FINANCE
CORP., NATIONAL BANK OF CANADA (New York, New York) (collectively, "Bank"),
TRANSTECHNOLOGY CORPORATION, a Delaware corporation ("TT") , and Electronic
Connectors & Assemblies, Inc., a Delaware corporation ("ECA, Inc." and,
together with TT, sometimes hereinafter referred to collectively in this
Fourth Amendment as "Borrowers").
RECITALS
A. On June 21, 1991, TT and Bank entered into a certain Revolving Loan
And Security Agreement (the "Loan Agreement," all terms defined therein being
used in this Fourth Amendment with the same meaning unless otherwise stated)
under the terms of which Bank loaned to TT $9,000,000 on a revolving loan
basis and $4,000,000 in the form of letters of credit pursuant to the
provisions set forth in the Loan Agreement.
B. On December 18, 1991, TT and Bank entered into a certain First
Amendment To The Revolving Loan And Security Agreement (the "First Amendment")
to provide for (1) the elimination of the $4,000,000 sub-limit imposed on TT
by Bank with respect to funding of the Letter of Credit Facility, (2) the
modification of certain covenants, and (3) the waiver by Bank of TT's
compliance with Section 7.1 (N) of the Loan Agreement relating to TT's net
worth for the period ended September 29, 1991.
C. On December 10, 1992, TT and Bank entered into a certain Second
Amendment To The Revolving Loan And Security Agreement (the "Second
Amendment") to provide for (1) an increase in the maximum principal amount of
borrowings under the Revolving Loan from $13,000,000 to $25,000,000 (inclusive
of the issuance by Bank to TT of a maximum of $5,000,000 of standby letters of
credit), (2) a modification to the rate of interest charged on borrowings
under the Revolving Loan to provide for a rate of interest based on the Base
Rate or LIBOR (as defined therein), (3) a modification to the Borrowing Base
to permit loan advances against the Eligible Inventory of TT, (4) the
modification of Bank's Collateral of TT to include machinery and equipment of
TT, (5) the modification of certain financial covenants of TT, (6) the payment
by TT of certain dividends, and (7) the extension of the Termination Date of
the Loan Agreement.
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D. On December 31, 1992, TT and Bank entered into a letter agreement
(the "Letter Agreement") to permit TT to pay dividends in accordance with
Section 7.2(H) of the Loan Agreement, as amended, commencing with the quarter
ending December 31, 1992.
E. On August 2, 1993, TT and Bank entered into a certain Third
Amendment To The Revolving Loan And Security Agreement (the "Third Amendment")
to provide for (1) an increase in the maximum principal amount of borrowings
under the Revolving Loan from $25,000,000 to $35,000,000 (inclusive of the
issuance by Bank to TT of a maximum of $5,000,000 of standby letters of
credit), (2) a term loan facility in the principal amount of $10,000,000 with
interest accruing at a rate equal to one-quarter (1/4) percentage points above
the Base Rate, (3) the grant to Bank of a mortgage on the Palnut Property (as
defined in the Third Amendment), (4) a modification to the Borrowing Base to
increase the amount of funds TT may borrow against Eligible Inventory from
$13,000,000 to $18,000,000, and (5) the establishment of a termination fee
upon the prepayment by TT of the term loan.
F. TT has established ECA, Inc., a wholly-owned subsidiary of TT, for
the purpose of purchasing and distributing electrical connectors on a
worldwide basis.
G. Borrowers have requested that Bank make available to ECA, Inc. funds
under the Revolving Loan in accordance with the provisions of the Loan
Agreement, as amended.
H. In consideration for Bank agreeing to loan and re-loan funds to ECA,
inc. under the Revolving Loan in accordance with the provisions of the Loan
Agreement, as amended, ECA, Inc. desires to (1) assume as co-obligor all
obligations and liabilities of Borrowers due and owing to Bank now or
hereafter arising under the Loan Agreement, as amended, and (2) grant to Bank
a security interest in and to its Collateral in accordance with the provisions
of this Fourth Amendment.
I. Borrowers and Bank now desire to amend the Loan Agreement, as
amended, to (1) add ECA, Inc. as a co-obligor for the repayment of all loans
to Borrowers by Bank and (2) provide for such other amendments and
modifications as are set forth in the provisions of this Fourth Amendment.
J. Due to the affiliation and financial interdependence of Borrowers,
Bank and Borrowers have determined that it would be in their respective best
interests for each Borrower to be a joint and several obligor of each other
Borrower's obligations to Bank in accordance with the provisions set forth in
the Loan Agreement, as amended by the First Amendment, the Second Amendment,
the Letter Agreement, the Third Amendment, and this Fourth Amendment.
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PROVISIONS
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
SECTION I. AMENDMENTS TO LOAN AGREEMENT.
The Loan Agreement is amended as follows:
A. On and after the effective date of this Fourth Amendment, each
reference in the Loan Agreement to "this Agreement," "hereunder," and
"hereof," or words of like import referring to the Loan Agreement shall mean
and refer to the Loan Agreement, as amended by the First Amendment, the Second
Amendment, the Letter Agreement, the Third Amendment and this Fourth
Amendment. The Loan Agreement, as amended by the First Amendment, the Second
Amendment, the Letter Agreement, The Third Amendment and this Fourth
Amendment, is, and shall continue to be, in full force and effect and hereby
is ratified and confirmed in all respects.
B. On and after the effective date of this Fourth Amendment, each
reference in the Loan Agreement, as amended, to "Borrower" or words of like
import referring to Borrower shall mean, refer to, and include ECA, Inc. and
shall hereinafter be treated as referring to "Borrowers" on a collective basis
and in the aggregate.
C. Grant of Security Interest. To secure the prompt payment and
performance of the Obligations, ECA, Inc. hereby grants to Bank in accordance
with the provisions of Section 4.1 of the Loan Agreement, as amended, a
continuing security interest in and to all of the Property of ECA, Inc.
described in Section 4.1(A) through (G) of the Loan Agreement, as amended,
whether now owned or existing or hereafter acquired or arising and wheresoever
located.
D. Paragraphs (MM) and (JJJ) of Section 1.1 of the Loan Agreement are
amended in their entirety as follows:
(MM) Promissory Note. The Promissory Note executed by TT and
delivered to Bank, dated June 21, 1991, as amended by (1) the First
Amendment To Promissory Note, executed by TT and delivered to Bank, dated
December 10, 1992, (2) the Second Amendment To Promissory Note, executed
by TT and delivered to Bank, dated August 2, 1993, and (3) the Third
Amendment To Promissory Note in the form attached to the Fourth Amendment
as Exhibit A (with such changes or modifications, if any, to which
Borrowers and National Canada Finance Corp. may agree) evidencing the
Revolving Loan made by National Canada Finance Corp. pursuant to Section
2.1(A) of this Agreement, together with all amendments thereto and all
notes issued in substitution therefor or replacement thereof.
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(JJJ) Term Note. The Term Note executed by TT and delivered to Bank,
dated August 2, 1993, as amended by the First Amendment To Term Note, in
the form attached to the Fourth Amendment as Exhibit B (with such changes
or modifications, if any, to which Borrowers and National Canada Finance
Corp. may agree) evidencing the Term Loan made by National Canada Finance
Corp. pursuant to Section 2.2(A) of this Agreement, together with all
amendments thereto and all notes issued in substitution therefor or
replacement thereof.
SECTION II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS.
Each Borrower represents, warrants, and covenants that it has good and
marketable title to the Collateral free and clear of all liens, claims,
mortgages, security interests, pledges, charges or encumbrances whatsoever
(other than Permitted Liens or as have otherwise been permitted by Bank
pursuant to the Loan Agreement, as amended), except as have been granted to
Bank.
A. To the extent such representations, warranties and covenants pertain
to or are to be performed by Borrowers, all representations, warranties and
covenants in the Loan Agreement, as amended by the First Amendment, the Second
Amendment, the Letter Agreement, and the Third Amendment, shall continue and
be binding on Borrowers under this Fourth Amendment.
SECTION III. CONDITIONS PRECEDENT.
Each Borrower acknowledges that the effectiveness of this Fourth
Amendment is subject to the receipt by Bank of the following documents on the
date of this Agreement, all in form and substance satisfactory to Bank and its
counsel:
A. A certified copy of resolutions of Members of the Board of
Directors of each Borrower approving this Fourth Amendment and all of the
matters described in this Fourth Amendment, and authorizing the
execution, delivery, and performance by Borrowers of this Fourth
Amendment, the Third Amendment To Promissory Note, the First Amendment To
Term Note, and every other document required to be delivered pursuant to
this Fourth Amendment.
B. The Third Amendment To Promissory Note executed by Borrowers
and accepted by Bank in substantially the same form as is attached to
this Fourth Amendment as Exhibit A.
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C. The First Amendment To Term Note executed by Borrowers and
accepted by Bank in substantially the same form as is attached to this
Fourth Amendment as Exhibit B.
D. A certificate signed by a duly authorized officer of each
Borrower to the effect that:
(1) As of the date hereof, no Event of Default has occurred
and is continuing, and no event has occurred and is continuing that,
with the giving of notice or passage of time or both, would be an
Event of Default; and
(2) The representations and warranties set forth in Section
6.1 of the Loan Agreement are true as of the date of this Fourth
Amendment.
E. A certificate of each Borrower's corporate secretary certifying
(1) to the incumbency and signatures of the officers of each Borrower
signing this Fourth Amendment and every other document to be delivered
pursuant to the Fourth Amendment, (2) to the effect that TT's Certificate
of Incorporation has not been amended since the execution of the Loan
Agreement, (3) to the effect that TT's Bylaws have not been amended since
the execution of the Second Amendment, and (4) attached thereto is a
true, correct and complete copy of the Certificate of Incorporation and
Bylaws of ECA, Inc., and each of Borrower's Certificate of Incorporation
and Bylaws are in full force and effect as of the date of such
certificate.
F. UCC-1 Financing Statements signed by a duly authorized officer
of ECA, Inc.
G. A good standing certificate for ECA, Inc. from the Secretary of
State for each of Delaware and Illinois.
H. Such other documents as Bank may reasonably request to
implement this Fourth Amendment and the transactions described in this
Fourth Amendment.
SECTION IV. APPLICABLE LAW.
This Fourth Amendment shall be deemed to be a contract under the laws of
the State of New Jersey, and for all purposes shall be construed in accordance
with the laws of such State.
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SECTION V. COUNTERPARTS.
This Fourth Amendment may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and any
one of the parties hereto may execute this Fourth Amendment by signing any
such counterpart.
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment by
their duly authorized officers this 31 day January, 1994.
TRANSTECHNOLOGY CORPORATION NATIONAL CANADA FINANCE CORP.
By:/s/Chandler J. Moisen By:/s/Jack Jankovic
--------------------------- -----------------------------
Title: Sr. VP & CFO Title: Vice President
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ELECTRICAL CONNECTORS NATIONAL BANK OF CANADA
& ASSEMBLIES, INC. (NEW YORK, NEW YORK)
By: /s/Valentina Doss By: /s/Jack Jankovic
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Title: VP of Admin.& Secretary Title: Agent
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SCHEDULE OF EXHIBITS
Exhibit A - Form of Third Amendment To Promissory Note
Exhibit B - Form of First Amendment To Term Note
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